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Acme Packet Announces Stock Repurchase, Sending Stock Higher

From Bedford, Mass., late Thursday came the announcement from Acme Packet (APKT) that its board of directors was authorizing a $200 million common-stock repurchase over the next 12 months. As of the end of March, the company said it held more than $400 million in cash and had more than 68 million shares outstanding.

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In the press release, Acme Packet hedged its bets, giving no obligations that the company would follow through on the entire authorized amount and saying its board may suspend the program at any time, depending on market conditions. Those conditions were favorable for the company in the short-term: after this announcement, Acme Packet shares spiked and were up nearly 6 percent premarket Friday at about $16.50 per share.

In announcing the program through a press release, CEO Andy Ory said, “This common stock repurchase program demonstrates the confidence that the Board of Directors has in the prospects of the Company and further expresses its commitment to enhancing shareholder value.”

This would seem to be very welcome news for a few hedge funds, most noteworthy being Ken Griffin’s Citadel Investment Group and Stuart Peterson’s Artis Capital Management. Artis was invested for $21 million in Acme Packet at the end of March, but had shed 40 percent of its shares during Q1 of 2012. However, Citadel had boosted its share by more than 400 percent in the first quarter, holding $16.2 million in value at the end of March. Christopher Lord of Criterion Capital put out a million-share call option on the stock at the end of March – totaling more than $27 million.

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